A significant proportion of people with schizophrenia are characterized by impaired ability to socially engage with others, which may reflect social aversion secondary to defeatist beliefs; decreased motivation for social interactions; and/or impairment in the normal reinforcement value of social interactions. These impairments in social function have been shown to be associated with social skill deficits; and decreased ability to identify and remember emotional facial expressions and empathize with the emotional status of others. Unfortunately, pharmacological interventions have limited benefits for impaired social function, whereas psychosocial interventions provide only partial benefit for this critical aspect f the illness. The development of an effective intervention for functional outcomes remains a central therapeutic challenge. Cognitive Behavioral Social Skills Training (CBSST) uses corrective feedback and reinforcement provided by successful interactions to challenge and reduce defeatist performance beliefs that contribute to low drive and interfere with social functioning. CBSST has been shown to have modest effects on social function in people with schizophrenia. Oxytocin plays a critical role in the regulation of normal social affiliative behavir; it is hypothesized to enhance social affiliation through the reduction of social anxiety or risk aversion; the enhancement of motivation for prosocial approach behavior; and/or increased modulation of the salience and processing of social cues. People with schizophrenia have decreased oxytocin levels, which are associated with an impaired ability to identify facial emotions and decreased prosocial behaviors. The addition of oxytocin to CBSST is hypothesized to: 1) enhance the reduction of defeatist performance beliefs by reducing social risk aversiveness and avoidance; 2) enhance social skill acquisition through improvement of proximal social behaviors; and 3) facilitate the translation of learned social skills into communit practice through its effects on prosocial attachment behaviors and reduction in social disinterest. We will conduct a 24-week, double-blind, placebo- controlled, randomized clinical trial with a 3-month follow-up evaluation. The primary aim of the study is to collect preliminary data on the efficacy of combined CBSST + oxytocin for social function in schizophrenia. Secondary aims include the examination of the safety and acceptability of the proposed intervention. We will also examine whether the effects of the proposed intervention are mediated by reduced defeatist performance beliefs; increased ability to trust others; and/or improved performance on measures of facial recognition and memory. Finally, in an exploratory framework, we will examine the effects of the proposed intervention on symptoms, neuropsychological test performance, and global clinical improvement. We will obtain social function, mechanism of change, neuropsychological, and symptom assessments to examine the efficacy, safety, and mediation of treatment effects. The study will provide critical preliminary data on the clinical utility of oxytocin + CBSST for the improvement of social function in people with schizophrenia.